Gold Rush in Haiti!

Who will get rich?

Published 30 May 2012Part 1 of 4 parts

Haiti might be “poorest country in the Americas,” but the tiny nation is also sitting on a gold mine.

New Prime Minister Laurent Lamothe says he’s banking on the wealth in Haiti’s northern mountains to lift the country out of poverty, but if history is any guide, the mining of gold, silver and copper hidden in the hills will mostly benefit foreign shareholders as it scars and pollutes an already denuded and fragile landscape.

Haiti might have something to gain, but it also has much to lose.

While a handful of farmers earn $5 a day building mining roads, and while journalists talk up one or two drilling sites, quietly and carefully a Canadian company, Eurasian Minerals, has been buying up licenses – 53, to be exact – and cutting backroom deals, perhaps with the assistance of a high-ranking former minister now on the payroll.

Map of Eurasian Minerals licenses, as of late 2011.From: Eurasian Minerals website

The deals are so potentially good for the mining companies, and so bad for Haiti, that the former head of Haiti’s state mining agency recently denounced them in an exclusive interview with Haiti Grassroots Watch (HGW), calling on his government to either right the wrongs or “leave the minerals underground and let future generations exploit them.”

“Mines are part of the public property of the state, they are for the population. They aren’t the property of the people in power, or even the landowner,” geologist Dieuseul Anglade, who was then head of the Bureau of Mines and Energy (BME), added.

Eurasian and Newmont Mining, its partner and the world’s Number 2 gold producer, are also drilling illegally in one area – La Miel, in the northeast – in collusion with certain government members.

Haitian law differs from many other countries. It is more bureaucratic, but it also insures a modicum of protection up front. In order to drill – even for exploration – companies must get a mining convention signed by the prime minister and all the ministers. This convention sets the terms for any eventual mine.

Eurasian and Newmont are currently waiting for final approval of a convention that covers a huge amount of territory – about 1,350 square kilometers of land. But the convention has not yet been signed, partly because for most of the past 12 months, Haiti has been without a prime minister.

A team of contractors does exploratory drilling for Newmont in Grand Bois. The workers drilled 330 meters straight down into the mountain for 10 days, 24/7 to extract samples for testing. Three Dominicans and a half dozen Haitian workers were supervised by a Canadian engineer. Photo: Ben Depp

“We are ready to drill,” Newmont’s Daven Mashburn said about the region La Miel in a late 2011 interview. “Because the government of Haiti doesn’t really care… we can’t advance our licenses and that means people can’t get jobs.”

But the new government does care. Not long after that interview, the licenses did advance, although not in a legal manner.

“The government gave them a kind of ‘waiver’ while they are waiting for the convention to be signed,” explained Ronald Baudin, Haiti’s former Minister of Finance (2009-2011, prior to that he was Director General of the ministry), who oversaw negotiations with Eurasian while serving in the powerful position. “The government is conscious of what damage they are doing to the company. They have camps all over the country, with important logistics, and they are blocked because the convention can’t be signed.”

Baudin left office when the new government of President Michel Martelly took over in 2011. Today, the former minister is a paid consultant to the Eurasian-Newmont partnership – called “Newmont Ventures.”

As a former minister, Baudin ought to know what any Haitian lawyer can explain: a Memorandum of Understanding (MOU) cannot trump a law and there’s no such thing as a “waiver” to legislation.

“There is what is called a ‘hierarchy of law’ and according to the hierarchy, an MOU is weaker than a law. An MOU cannot annul a law. It cannot allow something which a law does not allow,” human rights attorney Patrice Florvilus explained.

The head of the state mining agency – the BME – did not sign the MOU, nor did his office even receive a copy, according to a source inside the agency.

“I didn’t agree with it for the sole and simple reason that if the law says you can’t do something, you can’t do it!” Anglade explained in an interview on May 24, 2012.

One of the first official acts of the new Lamothe government was to remove Anglade from his post, perhaps in part because of his refusal to sign the MOU?

Anglade, 62, has worked at the BME for almost 30 years and has been director for most of the last 20. He has a reputation for being honest.

Despite Anglade’s refusal to agree, the MOU was signed by the then-ministers of Finance and of Public Works in late March, and Eurasian happily reported to its shareholders on April 23 that “[t]he joint venture is allowed to drill on certain selected projects under the MOU, and drilling is currently underway.”

Eurasian and Newmont know the law, and according to a May 25 correspondence with HGW, appear to believe Anglade signed the document. But he didn’t.

Anglade also disagrees with the mega-mining convention that will likely be signed soon. After three months of waiting, Haiti finally recently got a new prime minister, Laurent Lamothe, who has pledged to make the country’s laws more business-friendly.

According to Anglade, the final version of the convention – which he rejected in a formal letter to then-President René Préval and then-Finance Minister Baudin – is much weaker than Haiti’s two, smaller existing mining conventions (for 50 square kilometers each) because key protective clauses have been removed.

Article 26.5 – in previous conventions – set a cap on the expenses a company can claim at 60 percent of revenues. Now it is gone, according to the BME chief.

“That means, the company can claim expenses up to 90 percent!” Anglade said.

A second clause was also removed, he said: Article 26.4, which assured profits are split 50-50, between the mining company and the government.

“During two years of negotiations, my position was clear,” said the 62-year-old, who has been a public servant his entire life and who also teaches math at the State University of Haiti. “The BME did not agree to taking those two things out. That happened at the cabinet level, at the Ministry of Finance… They had meetings and they took them out, but we didn’t agree. It was a minister who took them out. Ronald Baudin.”

Asked about the convention, Baudin said he could not speak about the details. But, he claimed, “today we have a text that has received the consensus of the company, the BME and the ministers of Public Works and Finances.”

Not according to Anglade. “There is nothing in the world that would make me take those articles out,” he said.

Public Works Minister Jacques Rousseau is Anglade’s superior. His ministry oversees the BME and has the pending convention. Rousseau has refused five requests for an interview; therefore the absence of the protective articles in the document cannot be confirmed. Still, Anglade swears that the measures are missing, and in the meantime, the illegal MOU is public, and Baudin is openly on Newmont’s payroll.

“I want the nation to be clear,” Anglade explained. “We here at the BME are not responsible for all the things that give the company an advantage.”

A photo of Ronald Baudin dating from when he served as Minister of the Economy and of Finances.Photo: Le Nouvelliste

When Baudin was asked about the potential conflict of interest of having served as Minister of Finance and then immediately afterward becoming a consultant to Newmont, he did not bat an eyelash.

“I know that in other countries when you finish in public service, there is a period of time during which you do not have the right to work in the private sector, but in that case, you get compensation. We don’t have that legislation,” Baudin said. “I have not received one gourde [about 2 US pennies] since I left, and I have to eat, right? I have to clothe myself…”